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541 ACOs in the Medicare Shared Savings Program saved Medicare $1.2 billion in 2019

Organizations such as the National Association of ACOs urge reforms to increase ACO growth and savings.

Susan Morse, Managing Editor

In 2019, 541 accountable care organizations in the Medicare Shared Savings Program generated $1.19 billion in total net savings to Medicare, the largest annual savings for the program to date, according to Centers for Medicare and Medicaid Services Administrator Seema Verma.

ACOs that took on downside financial risk outperformed ACOs that did not, with net per beneficiary savings of $152 per beneficiary compared to $107 per beneficiary, Verma said. 

 "Low-revenue" ACOs, typically led by physicians who mostly provide outpatient services, have generally performed better than "high-revenue" ACOs, generally led by hospitals that tend to provide both inpatient and outpatient services, Verma said in a Health Affairs blog. 

Premier took issue with this statement, saying while CMS cites better performance of 'low-revenue' or physician-led ACOs, its experience has not shown that to be the case.


CMS said this is the third consecutive year that the program has achieved net program savings and reduced post-acute care spending, along with hospitalizations and emergency department visits.

In 2018, CMS initiated Pathways to Success, requiring ACOs to take on downside risk sooner. 

When the redesign of the program was first announced, some stakeholders expressed concern that new ACOs would be reluctant to participate given the changes in the financial benchmarks and the speed at which ACOs would need to take on downside risk. 

The National Association of ACOs said only 5% of eligible ACOs took CMS's offer to enter the redesigned program structure early and instead chose to remain under the previous MSSP rules, diminishing ACO participation.

CMS said ACOs under Pathways to Success participation options performed better than legacy track ACOs, showing net per-beneficiary savings of $169 per beneficiary compared to $106 per beneficiary for legacy track ACOs.

New entrant ACOs under Pathways to Success achieved net per-beneficiary savings of $150. 

This is the first time ACOs new to the program had lower spending relative to their benchmarks in their first performance year, Verma said. 

Ninety-two percent of eligible ACOs earned quality improvement reward points in 2019, with ACOs showing the greatest improvements in the patient safety and care coordination quality domain. ACOs continued to show comparable or better quality performance on measures compared to other physician group practices.


CMS' Medicare Shared Savings Program is the agency's largest value-based payment program in fee-for-service Medicare for ACOs. 

The results include the first six months of performance for ACOs that joined one of the new participation options starting in July 2019 under Pathways to Success, as well as performance for ACOs that remained in one of the existing participation options or "legacy" tracks. 

Historically, ACOs in rural areas have realized smaller cost reductions than their urban counterparts. But under Pathways to Success, rural ACOs have improved their performance.

Among all the ACOs in the Shared Savings Program in 2019, urban ACOs generated $125 net per-beneficiary savings and rural ACOs generated $64 net per-beneficiary savings. 

However, the difference in average per-beneficiary reductions between urban and rural ACOs is much smaller for ACOs in the new participation options, which showed urban ACOs generating $170 net per-beneficiary savings and rural ACOs generating $158 net per-beneficiary savings. 

The new Community Health Access and Rural Transformation (CHART) model will support rural providers with upfront funding starting in 2022, to prepare them to join two-sided risk arrangements in the Shared Savings Program.

CMS had two application cycles, starting on July 1, 2019, and January 1. Due to the two application cycles, the number of ACOs taking on downside financial risk has nearly doubled.

ACOs may apply and renew their participation under Pathways to Success policies for a January 1, 2022 start date.


CMS extended the quality reporting submission period and provided additional relief to ACOs and their providers in response to the COVID-19 public health emergency, allowing nearly all ACOs to satisfactorily report quality data. 

CMS has made further regulatory adjustments in response to COVID-19, including removing costs associated with episodes of care for treatment of COVID-19 that include an inpatient admission when determining financial benchmarks and performance year spending, using primary care telehealth visits to assign beneficiaries to ACOs, and providing relief to reduce burden with reporting quality measures.

CMS is also allowing certain ACOs to extend their participation agreement in the shared savings program for an additional year and allowing certain new ACOs (those in the BASIC Track established in Pathways to Success, which allows ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk) to freeze their current risk level for 2021 to respond to the pandemic in their communities. 


Clif Gaus, president and CEO of the National Association of ACOs, said, "When we emerge from the ongoing pandemic, we'll need alternatives to fragmented fee-for-service and better cost-control strategies, which ACOs provide. There should be no debate that we need to foster the growth of more ACOs so their benefits are delivered to more seniors. To get program growth back on track, Congress needs to take a close look at the Value in Health Care Act, which makes several improvements to the Medicare ACO program and better incentivizes Advanced Alternative Payment Models."

Blair Childs, senior vice president of Public Affairs for Premier, said, " We believe it is important to maintain a level competitive playing field for all ACOs. Model designs that discourage inclusion of hospitals undermine the objective of ACOs, which is to coordinate care across all providers to improve care, as well as potentially jeopardize access to needed patient care. Changes are needed to speed progression to advanced risk-based models. Congress can further incent providers to participate in ACOs by lowering the APM Incentive Payment thresholds in MACRA to ensure more clinicians have the opportunity to become a Qualifying APM Participant and participate in Advanced APMs and by extending the 5% bonuses available to QPs participating in Advanced APMs."

Twitter: @SusanJMorse
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